IT stocks tumble again, NIFTY IT down 3%; here's how Indian firms could be impacted by Trump's tariff order

Last seen, the NIFTY IT index was trading over 3% lower at 33,686.70 levels.

All 10 constituents were trading lower. Coforge was down over 6%, while Persistent Systems was trading 5.68% lower.

The export-led Indian IT sector, analysts note, is not directly hit by Trump's tariff order on goods, but there could be worrisome indirect bearings on it arising out of a possible slowdown in decision-making and GDP growth in America over higher tariffs, which may then cloud demand from specific verticals.

The $250 billion Indian IT pack – which derives a substantial chunk of its revenue from servicing US clients – is in a wait-and-watch mode to assess the full impact as it unfolds in the coming quarters (as well as the trade negotiations in the offing that could sway equations).

On Thursday, April 3, IT stocks took a heavy beating and settled with deep cuts. The NIFTY IT index ended 4.21% lower at 36,283.50 levels, with all 10 constituents ending in the red. In 2025 so far, the index has slumped over 19%, data show.

During the December quarter for Indian IT services companies – the March quarter and full-year report card will be out in the coming days – North America accounted for nearly 48% of TCS' revenue, 58.4% for Infosys, and 50.8% (clubbed under 'Americas') for Tech Mahindra and so on, said a PTI report.

India's IT services sector has already been facing growth headwinds over the past quarters, with clients in the US and EU closely scrutinising tech spends amid economic pressures, while the increased charm of AI has led to fears of reduced job creation globally.

Adding to that now, prospects of global economic wars, given the US' fresh tariff offensive on trading partners and major allies, have deepened worry lines about a slowdown in the United States and uncertainties ahead.

"While the IT sector is not directly impacted by Trump's tariff order, there may be indirect impacts from slower GDP growth due to higher tariffs, which may impact demand from Mfg/Logistics and Retail verticals despite rate cuts," Jefferies said in its note.

Onshoring could potentially rise along with tighter immigration norms in the future, but IT firms are better placed to deal with these risks, it observed.

Rishi Shah, economist and partner at Grant Thornton Bharat, PTI reported, believes there are considerable uncertainties in the short term due to the newly imposed tariffs.

"There are considerable uncertainties in the short term due to the newly imposed tariffs, which are creating ripple effects across the global economy. This uncertainty may lead to slowdowns in decision-making and impact US growth, potentially creating second-order effects on Indian IT services companies," he said.

Anuj Sethi, Senior Director, Crisil Ratings, said while India’s IT services sector is not subject to tariffs by the Trump Administration, economic sluggishness in the US spawned by the plethora of tariffs imposed across sectors could increase inflationary pressures there and cause tightening of client budgets.

That can have a bearing on the revenue growth of homegrown IT service providers.